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Truckee Cannot Sustain 3 New Grocery Stores

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The Town of Truckee, in complete disregard to findings in previous and current economic retail studies that indicate the Town cannot sustain an influx of multiple grocery stores, is pushing forward with several new stores. In late December 2017, the Town’s Planning Commission approved a 35,000 square foot Nugget Markets in the Railyard Project. In January 2018, the same commissioners approved a 35,700 square foot Raley’s project to anchor the Soaring Ranch commercial development at Joerger Ranch. And in February 2018, the commissioners will consider a 17,600 square foot Grocery Outlet store located at Donner Pass Road.

The addition of 88,300 square feet of new grocery in Truckee is not sustainable. In 2010, the Town of Truckee retained Bay Area Economics (BAE) to, “analyze the potential economic impacts of the proposed PC-3 Specific Plan development on existing development and other planned development within the Town of Truckee.” The study touches on the addition of new retail grocery in Truckee through 2023. Below are some of the key findings:

  • “The food stores category shows an increase in demand through 2023 that could support only one full size grocery store (approximately 50,000 square feet).”
  • “This information suggests that if a full-sized supermarket is targeted also for PC-3, there would not be adequate demand to support the Town’s existing supermarkets plus the new grocery space planned for the Railyard and Gray’s Crossing.”

Existing stores will close in Truckee with the addition of 88,300 square feet of new grocery. In December 2018, the statewide advocacy group, Protect CEQA, retained Area Research Associates to study the implications of the proposed three new grocery stores on the Truckee market. Below are some of the key findings:

  • “Save Mart will close…After opening of the 3 proposed new supermarkets, it is projected to experience a cumulative impact that would reduce its profitability to 33% below break-even threshold. Population growth will do little to help this unit since it would be operating at 32% below break-even by 2021, certainly not providing enough incentive for it to continue operation.”
  • “New Moon Natural Foods will close… The proposed opening of all 3 proposed supermarkets will drop profitability at this unit to 27% below break-even levels. Population growth over the next 4 years will only minimally improve this impact, and because this store is an independent operator it will not have the sustainability of a large, chain supermarket.”

 JMA Ventures' (the Raley's developers) funded BAE Urban Economics memorandum reviews the issue of existing store closures with the addition of new grocery competitors. The January 2018 analysis, while stopping short of outright saying stores will close, indicated that a) the current market economy in Truckee is strong and, therefore, b) "Should an existing grocer close for some reason, there will likely be demand from other users to fill the available space, although it may be a non-grocery use and it may be necessary to subdivide a larger space into smaller spaces." In other words, even if stores close, the market is good enough that the vacant spaces won't be vacant for long. 

There are many remaining unanswered questions that the Planning Commission, for whatever reason, fail to adequately address such as:

Where will the workforce needed to fill all these new grocer jobs come from? There are plenty of “we’re hiring” signs on existing businesses throughout town. Where will these 300+ new workers come from?

Where will this new workforce live? Housing is already expensive in Truckee. Plus, for whatever reason, the Raley’s developers and the Planning Department, have taken the multi-family housing component out of the Soaring Ranch project. The explanation: it complicated the Raley’s application process to this is easier.

Will the wages be adequate enough for this new workforce to own homes? Again, Truckee is expensive with inadequate affordable housing options. Will this new workforce make livable wages to own homes? Can the afford to rent?

Truckee should not approve new growth and development just of the sake of doing so. The Town is ignoring its own studies, as well as studies conducted by other third parties, that indicate Truckee cannot sustain three new grocery stores. By approving one new grocery store, the town is immediately impacting their ability to succeed by approving additional new grocery stores. Further, no new stores should be approved that will negatively impact existing businesses or the historic downtown area.

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